Is Spam Email Illegal? Securities Lawyer 101

According to a recent McAfee report, email stock spamming is back in high gear. The latest McAfee Threats Report confirms a steep rise in spam email linked to bogus pump-and-dump stock schemes. In 2014, there will undoubtedly be a surge in spam email campaigns of pot stocks. For years, fraudsters have used spam to entice investors into investment scams. Many of these emails tout microcap companies through false and misleading statements to the marketplace. These bogus claims are made on social media such as Instagram, Facebook, Twitter and other social media, as well as on bulletin boards and chat room pages.

Some purport to allow investors to capitalize on a new technology or trend, strike it rich in an emerging economy such as medical marijuana, or market-time their way to huge profits. Subject lines and short messages are designed to create a sense of urgency to invest all with the goal of creating a run-up in price so that certain insiders and/or stock promoters can dump their shares.

Investors should treat emails like these with extreme caution and recognize they are likely part of a stock manipulation scheme created to enrich insiders and stock promoters.

The reality is that these emails are being sent by paid promoters or company insiders who stand to gain by selling their shares after the stock price is “pumped” up by the buying created by the spam. Once the scammers sell their shares, the stock price and volume dries up.

If you believe you’ve been defrauded or treated unfairly by a securities professional or firm, file a complaint. If you suspect that someone you know has been taken in by a scam, send a tip to the SEC.